Written by Sam Judd, from NZ Herald Online, 11th June 2012:
During such times of economic austerity, raising capital for environmentally positive projects has never been so hard.
Pure Advantage – an eminent group of Kiwi business leaders have released their first report today, which gives a scathing review on our environmental performance and identifies opportunities where New Zealand can create wealth through a sector that helps the environment.
They say that we have a once-in-a-generation opportunity for us to tap into a global worth of NZ$6 trillion annually and that in the race to get a slice of this huge pie we have an advantage over others because of our brand.
They provide plenty of figures to back up the opportunities in front of us, but the question is: how are we going to achieve this? Will we enter the race or will environmental compliance become a morbid marathon, where our standards continue to slip, our products are no longer bought overseas and tourists won’t return after swimming in a once pristine Kiwi river only to come out in hives and stinking of effluent?
Race entry forms and the road to run
Pure Advantage blames successive governments for failing to take the lead on a policy framework that facilitates green growth. I like it how they don’t suggest politicians should take the lead on changing the situation as I am sick of hearing that the “government should be doing something” when we identify environmental issues. It is industries and people who affect our environment that need to change. The government just needs to make it easy for this to happen.
History has shown that for a policy to stand the test of time, it has to appeal to people from across the political spectrum. Rarely do such initiatives come from poll-driven politicians that take every opportunity to shoot their opponents’ ideas down – the anti nuclear stance of David Lange being one of our few bi-partisan standouts.
This report argues that to get ahead in the green race, strong leadership is required from industry. Where else would such leadership come from? Can anyone out there envisage John Key welcoming a policy into the voting chamber from the perpetual-minority Green Party? What would his faithful blue-collar farming friends think about that? In their eyes, the unfortunate stigma of being “environmentalists” or “hippies” still hangs over many people trying to help the environment like a cloud of methane from a cow.
Enter Pure Advantage, whose trustees are heavy-hitting businesspeople that are breaking the mould. Suddenly, it is not just about caring for the environment it is about making money. Few could argue that they lack the experience and nous to identify opportunities for growing business in New Zealand.
But we cannot rush into the race unprepared. School students, universities and the general public (especially including the shareholders of the large corporates required to pay the entry fee) will need to be educated about not just the economic opportunities, but why the whole thing is important, because currently – and I say this from experience – the understanding of environmental issues in the community is very low.
Particularly tacit is the challenge in this report to traditional economics. If the intrinsic interdependency of the environment and economics they mention were explained to school students early on in New Zealand, perhaps we would have more bright new ideas entering this race?
The Starting Blocks
The Green Race paints an abysmal picture of our current environmental performance but then identifies success stories from overseas and some local opportunities that can be started in this sector.
$4 billion of savings to be made in New Zealand over the next 10 years in energy efficiency alone sounds like a solid starting block and when Kiwi innovators (of which we have produced many that we are proud of in the past) are given the incentive to get into this field, we will have flash new green inventions to sell overseas.
An important point is that we have to start now if we want to win prize money in the race. Aided by a cross-party government agreement in Denmark, the clean-tech sector now forms 11% of their total GDP, generating $23 billion a year largely through exporting technology for wind farms. Sweden boasts 3,500 clean-tech companies who generate $19 billion from this race while also improving their environmental scorecard and drastically reducing dependency on oil (a good tactic in the long run with ever-rising prices) through significant infrastructure investment in alternative fuels.
Pure Advantage highlights an estimate that it would be technically feasible to provide 100% of New Zealand’s liquid fuel and heating needs as well as 85% of our electricity needs through biofuels by planting marginal lands. They also mention that during off-peak times, we would have enough spare electricity to charge all New Zealand cars if they were swapped for electric models.
Such examples show that if we made a commitment across the board to a solid strategy for the Green Race, money will be generated and savings will be huge.
Perhaps the wheels are already turning and the influence of these heavy hitting entrepreneurs is starting to show. This week, I was in Wellington and noticed our country’s first ever, electric car recharging unit near the train station.
Is this a sign of this dearly needed industry-led environmental change entering the race?
If so, we can only hope that the tragic loss of Lloyd Morrison, a founding trustee of Pure Advantage and director of Infratil (who owns the Shell / Z network of petrol stations) will not turn this race into a marathon.
To download this ground-breaking report or get more information, head to Pure Advantage.
If anyone has suggestions of what we could do that would make money and help the environment, please leave a comment or email me.
Next week, I will discuss more environmental opportunities for economic growth and will focus on what I see as the biggest industry-led environmental policy decision in our history – that Fonterra is forcing farmers to fence off their waterways.